Ross Greenwood: Banks when they lend you money must already assess whether you have the ability to repay that loan.
Sean Hughes, ASIC Commissioner: The responsible lending obligations apply to credit that is wholly or predominantly for personal, domestic or household purposes.
Karen Cox, Financial Rights Legal Centre: People need to realise this is about a simple mathematical equation…its income minus expenditure.
Greenwood: the current law says lenders must do two things before entering any loan.
One – They must make reasonable checks into you. Two – they must not enter into any contract that is unsuitable for a consumer.
Hughes: We’ve also ensured that the consumers harmed by the lending are compensated.
Greenwood: but this could be toughened if consumer groups get their way.
Cox: it covers things like when you apply for a loan, do they have to look at your income and your expenses and to what extend do they have to verify that information.
Greenwood: A public hearing today started a process to consider making responsible banking laws tougher.
But banks including the Commonwealth and Westpac which gave evidence to the hearing warned any significant clampdown could make it harder for people to borrow and hurt the economy.
This was amplified by ANZ CEO Shayne Elliot who said a risk aversion has already affected most of our banks, making it tougher to get credit.
Shayne Elliot, CEO ANZ: As a bank however, our world is changing really, really radically.
Greenwood: Ross Greenwood, Nine News